How to Get Started Investing in Real Estate
Let me guess. You want to invest in real estate but have no idea where to start and don’t quite have enough time to figure it all out, gain your confidence and grow your real estate portfolio? Let’s learn how to get started investing in real estate.
That’s okay. I get it. So do many of our other investors and you are not alone!
Although real estate has proven to be a reliable and low-risk way to grow your nest egg over time, getting started can be daunting. As a result, many aspiring investors may feel hesitant to take the first steps. Some of them never do and get stuck in analysis paralysis.
How To Get Started Investing In Real Estate
One common strategy for new investors is to begin with smaller investments and gradually work their way up to more significant deals. This happens a lot and allows individuals to become more comfortable with the process of investing in real estate before they get into larger deals.
As investors gain more experience and knowledge, they can consider actively investing and running larger assets, like apartments, storage facilities, short-term rental portfolios, etc.
Or you can skip both of the options above (or use a combination of both) and embrace more passive investment opportunities, which require less involvement but can yield higher returns.
At Ohana Investment Partners, we work with several investors who began their real estate journey by investing in short-term or vacation rental properties. When you invest in a vacation rental or Airbnb in a desirable location, you can spend time with your loved ones while also building your capital and acquiring valuable real estate knowledge. But it can be a lot of work and take a lot of time. It can also be frustrating, for some, to deal with all of the headaches that can come with guests.
If your main goal is to have freedom, you may eventually transition from actively managing investment projects to more passive ones. Or you may start out with passive investments. The choice is yours.
However, there are a few steps you should take before starting your real estate investing journey. Keep reading for a brief guide on how to take your first steps towards success in real estate investing.
When Learning How Tog Get Started Investing In Real Estate You Need To Identify Your Strengths
As with much in life, it’s best to focus on your strengths and recognize your abilities. Everyone has areas where they struggle, some where they perform adequately, and others where they truly shine. Directing our attention towards our strongest skills leads to better performance and greater fulfillment. This principle also applies to the realm of real estate investing.
It is crucial for investors to recognize their strengths and focus on them. For example, if an investor is good at recognizing potential in properties but not good at executing plans, they should focus on understanding the business plan and seeing the potential and how value is added to the asset. They should also be part of a team who excels in executing plans. It is important to identify the strengths of others when building a team. Everyone’s unique talents and expertise can be utilized to make the team more productive and creative, leading to a more successful deal. This is also true when you look at the general partner and limited partners, functioning as a team, in a syndication.
Design A Plan
The next step after identifying everyone’s strengths and passions is to create a plan to make your real estate investment aspirations a reality. Many people want to create a life based on personal goals and desires, and investing in real estate can help them achieve that.
To create a successful real estate investment plan, it is important to conduct research and do your due diligence beforehand. This involves exploring various investment options and determining the best investment strategy according to your personal goals. Additionally, staying informed about current market trends is crucial. Developing a solid plan early on is crucial, as it may require some adjustments along the way. But having goals and setting a foundation so you know if a deal, or offering, is right for you is important. Compare it to your goals. If it meets your criteria, move forward. If not, move on!
After formulating a plan for your life, including your real estate investment endeavors, it is crucial to take action. This is my pet peeve and where a lot of people get stuck.
I know it can be scary and uncomfortable. But, if you want to take advantage of one of the greatest wealth builders, you have to take action.
Even though this may seem like an obvious step, it can also be the most challenging one for some. It is common to become overly absorbed in researching and conducting due diligence on real estate investments, resulting in what we call “analysis paralysis”. If you don’t take action, you will not make any progress.
To address this, creating a timeline can be effective. Begin with your goals and due diligence for offerings. Include a specific action step for each stage and assign dates to those actions, including embarking on your first passive real estate investment. It is important to create a realistic timeline that also challenges you to complete the tasks efficiently. Avoid making the plan too comfortable. One of my favorite saying is “All of your dreams are outside of your comfort zone”.
The purpose of taking action is to move from your current situation (point A) to the desired lifestyle (point B) you have in mind. By taking action, you can accelerate your progress towards achieving your real estate investment goals and the life you desire and deserve.
Propel Yourself Forward
Investing in real estate can be a daunting experience, particularly for newcomers. The thought of making significant financial investments can be overwhelming. However, it’s essential to understand that progress doesn’t always have to be perfect. The key to making progress is to trust yourself, your instincts, and your strengths.
As time goes by, you’ll become more familiar with your role as a passive real estate investor, but until then, it’s up to you to push yourself forward. It’s important to keep your focus on the end goal and remember that every step you take, no matter how small, is moving you closer towards success. Real estate investing is a journey that requires continuous learning, taking risks, working with a team you know, like and trust and being able to adapt to market changes.
Building a successful real estate portfolio requires a clear vision, starting with multiple investments, and taking consistent action towards your goals. By following this cycle, you can enjoy the process of building wealth, while also living an intentional life.
Remember that the journey to success in real estate is a continuous learning process, and it takes time and effort to achieve your desired outcomes. You’ve got this!
And we, at Ohana Investment Partners, are here for you. To walk with you every step of the way.